Caregiver Turnover Spikes 9%, Fuels Home Care Challenges

By Emily Study | April 19, 2015

It’s no secret that caregiver turnover plagues the home care industry. But the 9% increase in turnover this year, coupled with the growing shortage of caregivers, could leave industry players strapped for survival.

Over the past year, the median caregiver turnover rate spiked 9% to about 61% in 2015, said Aaron Marcum, founder and CEO of Home Care Pulse, and creator of the Private Duty Benchmarking Study, during a recent webinar.

Now in its sixth edition, the 2015 study — the focal point of the webinar — is a survey that gauges the national and regional benchmarks on finance, sales, marketing and operations of hundreds of private duty home care agencies across North America. This year’s edition included aggregated data of 701 providers representing more than 1,000 locations.

New to the survey this year, Home Care Pulse analyzed where providers rank in the overall industry when it comes to their caregiver turnover.

For example, if a provider’s caregiver turnover ratio was 18.9% for 2014, then the provider outperformed 95% of the industry. If this ratio was 40%, the provider outperformed 75% of the industry, and if it was 61.6%, it outperformed 50% of the industry.

On the lower percentile end, providers whose turnover rate was a startling 173.7% still outperformed 5% of the industry. And those with 103% turnover outperformed 25% of the industry.

“If you’re in the 60% [range] or anything above 50%, I think it’s a huge red flag and you’ve got to pay attention to it,” Marcum said. “Those who have 50% turnover may not survive the next 10 years.”

While turnover in the home care industry is seemingly par for the course, Marcum noted that the issue is exacerbated by providers’ tendency to “panic” when problems arise.

“Too often because we have a client to fill or a caregiver left, … we panic, and if they can pass the background check we hire them,” he said. “Don’t panic when it comes to hiring.”

The ‘Antidote’ to Caregiver Shortages

While no industry is impervious to staff turnover, the phenomenon is particularly severe when it comes to home care, which faces an impending caregiver shortage as providers see a swelling aging demographic in the years to come.

For example most studies before passage of the Affordable Care Act projected shortages of at least 124,000 physicians and 500,000 nurses by 2025, according to the study “U.S. Healthcare Workforce Shortages: Caregivers” by Walt Zywiak. And the additional 32 million covered lives resulting from the ACA requires inflating those projections — by 31,000 physicians, for example, some estimates show.

This caregiver shortage, Marcum said, “is the No. 1 threat” to home care providers. More than 62% of providers in this year’s Benchmarking study listed caregiver shortages as one of their top-three threats for 2015. In comparison, only 48.9% listed this as one their top threats last year.

“The answer to caregiver shortages, and really what I call the antidote to caregiver shortages, is caregiver retention,” Marcum said. “In order to retain, there are a couple things [providers can do].”

First, measure and benchmark turnover.

“If you’re not measuring turnover, it’s really hard to find out where you’re at today, how you compare to the industry and what you [need to do to increase retention],” he said. “Just take a period of time and look at who you have today as far as caregivers, and down the road what percentage of those caregivers are left.”

Second, do not settle for just any caregiver. Providers need to make sure they’re hiring employees who share their “why” — in other words, those who share their mission, vision and goals.

Developing a more specific and targeted job advertisement can help weed out those caregivers who are only looking for a paycheck, not necessarily looking to work at a particular agency, Marcum said. In the job ad, explain why they should apply to your organization, and why they shouldn’t. Doing so will attract the right caregivers, who will be more likely to stay with the company.

“This avoids the panic situation,” he said.

While there isn’t a quick fix for the issue that has long plagued the industry, making a few key changes can increase caregiver retention and help alleviate the challenges providers face by caregiver shortages.